Complementarities in Spectrum Markets

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Executive Summary

It is widely recognized that current policies for allocating wireless spectrum have led to inefficiencies and underutilization. One proposed solution to this is to enable "Spectrum markets", which allow for entities to sell and/or lease spectrum dynamically over time. In this paper, the authors consider the design of such a market and how this is influenced by the underlying properties of the wireless medium. In particular, they focus on the role of interference created by different agents who may purchase the use of the same spectrum band at nearby locations. Such interference can result in "Complementarities" among the spectrum goods being traded, which complicates the design of an efficient market mechanism.

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